2010 (4) TMI 1076

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.... order for the sake of convenience. Assessment Year 2003-2004 2. First ground is against the taxing of profit on sale of investments amounting to Rs. 8,24,73,523. Briefly stated the facts of this ground are that the assessee is engaged in the business of general insurance, preparing the accounts as per the requirements of IRDA. On the perusal of the detail filed by the assessee it was noticed by the A.O. that exemption was claimed in the computation of income for a sum of Rs. 8.24 crore as profit on sale of investments as per Rule 5(b) of the First Schedule. The Assessing Officer did not accept the assessee's contention as in his opinion there was no provision in Rule 5(b) of First Schedule for reducing the profit from sale of investments ....

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.... 5. The only other issue raised in this appeal is against the confirmation of disallowance of expenses u/s.14A amounting to Rs. 75,82,000. The facts of this ground are that the assessee earned interest income of Rs. 3.85 crore from investment made in debentures / bonds. The said interest was exempt from incometax u/s.10(23G). The assessee claimed deduction for total expenses of Rs. 2,668.48 lakhs. The Assessing Officer, applying the provisions of section 14A, made disallowance of expenses amounting to Rs. 89.28 lakhs. The learned CIT(A) reduced the disallowance to Rs. 75.82 lakhs, against which the assessee has come up in appeal before us. 6. Before us the learned Counsel for the assessee contended that similar issue came up before the Tr....

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....ection of the learned CIT(A) to tax profit on sale of investments amounting to Rs. 2,81,64,661. Both the sides are in agreement that the facts and circumstances of this ground are mutatis mutandis similar to those of immediately preceding assessment year. Following the view taken by us in assessment year 2003-2004 (supra) we order for the deletion of the entire addition. This ground is allowed. 10. Second ground about the head under which such profit on sale of investments should be taxed becomes academic in view of our decision on ground no.1. This ground is dismissed. 11. Ground no.3 of the assessee's appeal and the only issue of Revenue's appeal is against the disallowance u/s.14A. The Assessing Officer made addition of Rs. 1,48,18,000....